36 True/False questions
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Four Generic Supply Chain Service Outputs Eliminate Discrepancies → Spatial convenience
Lot size
Waiting time
Product variety and assortment -
Lot size → is the number of units to be purchased in each transaction
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Operational Performance → A traditional strategy with a focus on creating successful individual transactions between the company and its customers
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Availability → measures the magnitude or impact of stockouts over time
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The Model Identifies Gaps Managers Must Fill to Help Satisfy Their Customers → -Delivered complete
-Delivered on time
-Delivered at the right location
-Delivered in perfect condition
-Delivered with complete and accurate documentation (e.g. packing list, invoiced at correct price)
This requires the total order cycle performance to be executed with zero defects -
Micromarketing or One-to-One Marketing recognizes → that each individual customer may indeed have unique requirements
For example, Wal*Mart and Target are both mass merchandisers - However, their requirements to interact logistically with suppliers differs significantly. -
Transactional Marketing → A traditional strategy with a focus on creating successful individual transactions between the company and its customers
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The focal point of a business strategy must be the customers that it intends to serve → 1.) Knowledge
2.) Standards
3.) Performance
4.) Communications
5.) Perception
6.) Satisfactions/quality -
Basic Elements of Customer Service → Level 1: Customer service
Assess industry and competitor practices
Achieve internal standards for performance cycles
Level 2: Customer satisfaction
Assess customer perceptions of satisfaction
Manage performance cycle levels to keep customers satisfied
Level 3:Customer success
Assess customer requirements
Extend supply chain to include our customer's customer
Provide value-added services for select customers
Manage performance cycles and levels to address needs of each customer segment in the extended supply chain -
Waiting time is → the amount of time the customer must wait between ordering and receiving products
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Achieving Customer Success Requires Knowledge of Individual Customer Requirements → Us -> Our customer -> Our customer's customer -> Us
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Customer Expectations Related to Logistical Performance → Reliability
Responsiveness
Access
Communication
Credibility
Security
Courtesy
Competency
Tangibles
Knowing the customer -
One-to-one relationships can → A new strategy with a focus on the development of long-term relations with key supply chain participants in an effort to develop and retain long-term preference and loyalty
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Product variety and assortment differs by → -supply chain
Supermarkets may have over 35,000 items on the shelves
Warehouse stores generally stock 8,000 to 10,000 items with only one brand and size of an item
Convenience stores may stock only a few hundred items -
Service Reliability → Ability to Perform All Order-related Activities & Provide Critical Information
-Service reliability involves a combination of logistics attributes beyond simply availability and operational performance.
1.)Damage free measures how many shipments arrive without damaged products
2.)Error-free invoices measures what percentage of invoices contain no errors
3.)Shipment matches order measures how many shipments contain the exact amount of product ordered
4.)Shipped to correct location measures how many shipments are made to the customer's selected location
Plus a capability and willingness to provide customers with accurate information regarding operations and order status -
Three Levels of Customer Accommodation → Customer service
Customer satisfaction
Customer success
Supply chains provide a mix of services, both generic and custom, in order to accommodate a range of customer requirements -
Increasing Customer Expectations → Level 1: Customer service
Assess industry and competitor practices
Achieve internal standards for performance cycles
Level 2: Customer satisfaction
Assess customer perceptions of satisfaction
Manage performance cycle levels to keep customers satisfied
Level 3:Customer success
Assess customer requirements
Extend supply chain to include our customer's customer
Provide value-added services for select customers
Manage performance cycles and levels to address needs of each customer segment in the extended supply chain -
Relationship marketing → A traditional strategy with a focus on creating successful individual transactions between the company and its customers
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Developing a Customer Accommodation Strategy → Basic principle of supply chain logistics is that customers should be segmented based on their service needs
Supply chains must be adapted to serve those segments
Companies need:
1.)A framework for choosing the appropriate customer specific strategies
2.)Programs for customer relationship management -
Expectancy disconfirmation states if → a customer's expectations of a supplier's performance are met or exceeded, the customer will be satisfied
If Perceived Performance > = Expectations, then Satisfaction
If Perceived Performance < Expectations, then Dissatisfaction -
Customer Success Requires a Comprehensive Supply Chain Perspective → Us -> Our customer -> Our customer's customer -> Us
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Spatial convenience is → the amount of shopping time and effort will be required on the part of the customer
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Who is the Customer? → is the number of units to be purchased in each transaction
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Overview of Customer Relationship Management → Customer-focused marketing
Customer service
Customer satisfaction
Customer success
Developing customer relationship management strategy -
3 Levels of Customer Focus → Level 1: Customer service
Assess industry and competitor practices
Achieve internal standards for performance cycles
Level 2: Customer satisfaction
Assess customer perceptions of satisfaction
Manage performance cycle levels to keep customers satisfied
Level 3:Customer success
Assess customer requirements
Extend supply chain to include our customer's customer
Provide value-added services for select customers
Manage performance cycles and levels to address needs of each customer segment in the extended supply chain -
Many firms establish their basic service platforms using two factors: → Competitor or industry acceptable practice
-Minimum and average service performance levels have emerged in most industries
The firm's overall marketing strategy
-High service levels needed to compete on basis of logistics competency
-Low service levels are more common when competing on the basis of price
Zero-defect approach is not taken across the board for all customers
Establish internal performance standards for each service component to reflect industry practice, cost, and resource requirements -
Basic Customer Service Provides Customers ... → With the right amount
Of the right product
At the right time
And the right place
In the right condition
At the right price
With the right information -
Fill Rate → measures the magnitude or impact of stockouts over time
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P (zero defects) → the amount of time the customer must wait between ordering and receiving products
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The Perfect Order is an order that is: → -Delivered complete
-Delivered on time
-Delivered at the right location
-Delivered in perfect condition
-Delivered with complete and accurate documentation (e.g. packing list, invoiced at correct price)
This requires the total order cycle performance to be executed with zero defects -
Customer relationship management (CRM) is → a process for improving the overall performance of a business by better understanding and anticipating the wants and needs of customers
One CRM example - Procter & Gamble has employees who live and work in the city of its largest customer Wal*Mart
Logistics has primary responsibility for many of the processes that drive value and customer success -
Discrepancies Must be Overcome to Enable Exchange of Goods and Services → -Discrepancy in space refers to the fact that the location of production activities and location of consumption are seldom the same
-Discrepancy in time refers to the difference in timing between production and consumption
-Discrepancy in quantity and assortment refers to the mismatch between customer demand and manufacturing supply
-Customers seek small quantities and wide assortment
-Firms specialize in large quantities of a limited assortment -
Stockout → measures the magnitude or impact of stockouts over time
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Basic service platform → Operational performance level
Service reliability level
Availability level -
Orders Shipped Complete → requires shipping everything that a customer orders to count as a complete shipment
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Value-Added Services → is the number of units to be purchased in each transaction